Federal judge scuttles Trump's rule mandating drug prices in TV ads
The Trump administration has endured a setback after a federal court overturned a ruling — obligating drug manufacturers to disclose the list price of their therapies in television adverts — hours before it was stipulated to go into effect.
In May, the HHS published a final ruling requiring drugmakers to divulge the wholesale acquisition cost— of a 30-day supply of the drug — in tv ads in a bid to enhance price transparency in the United States. The pharmaceutical industry has vehemently opposed the rule, asserting that list prices are not what a typical patient in the United States pays for treatment — that number is typically determined by the type of (or lack thereof) insurance coverage, deductibles and out-of-pocket costs. Although there is truth to that claim, the move was considered symbolic in the Trump administration’s healthcare agenda to hold drugmakers accountable in a climate where skyrocketing drug prices have incensed Americans on both sides of the aisle.
The suit, vacated by a DC federal judge on Monday, was brought on by a trifecta of drugmakers: Merck $MRK, Eli Lilly $LLY and Amgen $AMGN, in addition to the National Association of Advertisers, a trade association. They argued that the rule eclipsed HHS’s authority because Congress “neither expressly nor impliedly granted HHS the power under the Social Security Act to regulate drug marketing” and contended that compelled speech violated the First Amendment.
The court agreed that the HHS does not have the statutory authority to implement the drug price disclosure ruling. Although the court does not take “any view on the wisdom of requiring drug companies to disclose prices. That policy very well could be an effective tool in halting the rising cost of prescription drugs. But no matter how vexing the problem of spiraling drug costs may be, HHS cannot do more than what Congress has authorized,” it concluded.
The American Association of Retired Persons (AARP), a non-profit organization that advocates for the elderly, said it was disappointed by the court’s decision.
“High drug prices disproportionately hurt older Americans, particularly Medicare Part D enrollees who take an average of 4.5 prescription medications each month. Most Medicare beneficiaries live on fixed incomes, with a median annual income of just over $26,000,” AARP executive VP and chief advocacy and engagement officer Nancy LeaMond said in a statement. “Today’s ruling is a step backward in the battle against skyrocketing drug prices and providing more information to consumers. Americans should be trusted to evaluate drug price information and discuss any concerns with their health care providers.”
Trump has long lambasted the pharmaceutical industry for its pricing policies. After capturing the presidency, Trump proclaimed drugmakers were “getting away with murder.” His administration has since unveiled a string of proposals to temper pricing, including one last year engineered to peg drug prices to overseas rates for Medicare beneficiaries.
As he mounts his re-election bid for 2020, Trump suggested on Friday that an executive order is being prepared to implement a “favored nations clause” to reduce drug prices in the United States, in conversation with reporters on the south lawn of the White House.